It owes tens of millions of dollars, is on the verge of bankruptcy, and its creditors come to the door to collect debts... As the e-sports team with the most fans and the most well-known in China, today RNG has reached the point of a poor path.

As the popularity of games declined, the market gradually returned to rationality. Established capital gradually withdrew, and after emerging capital entered, the e-sports competition industry basically completed renewal and iteration.

RNG faces bankruptcy crisis

The CEO revealed that he owes tens of millions of dollars, and learned from Dongfang to bring goods to his own rescue

Recently, RNG Club CEO Li Jieming revealed in an interview with negative reviews that the club has hit rock bottom and may soon go bankrupt. In addition, there is a huge hole of tens of millions of dollars, and operating expenses of several million per month.

In addition to the news that the club is on the verge of bankruptcy, Li Jieming also revealed a number of key information points. Currently, RNG has only one sponsor left. It has not been flat over the years, has not been profitable, and has always relied on blood transfusions to operate. In the future, the club will save itself by issuing cards, issuing NFTs, filming skits, and live streaming to bring goods.

Li Jieming said that Oriental Selection was inspired by RNG. In the future, the club will bring “goods” live from a gaming perspective and aim to achieve the goal of becoming a game version of “Oriental Selection” in half a year.

In fact, RNG's poor operation is no secret.

As early as 2022, MLXG (Liu Shiyu), a former RNG team member, took the old owner to court. MLXG revealed on his personal Weibo account that RNG had been defaulting on his live streaming salary for two years. Many negotiations with RNG were to no avail, and had no choice but to file a lawsuit during the S11 World Finals. In 2023, RNG once again set off a wave of salary claims, and many players demanded wages from RNG in the comment area.

According to Tianyan investigation, Shangrao Leyou Network Technology Co., Ltd., which belongs to RNG, involved 18 disputes, mostly contract disputes, private loan disputes, etc. Yao Jincheng (Bai Xing), the owner of the RNG team, has now been restricted from high consumption and listed as an untrustworthy executee (Lao Lai). The case shows that his outstanding amount exceeds 17.99 million yuan, and the failure rate exceeds 97%.

In recent years, RNG has been riddled with lawsuits, and many viewers ridiculed: “This company has more lawsuits than contests.” As the incident continued to come to light, RNG's image in the minds of fans plummeted.

The sponsor logo is printed all over the team uniform, and the champion gets soft hands

The club still can't escape the loss situation

The loneliness of RNG is astonishing; this once beautiful club has reached the point of reaching the end of its path.

How popular was RNG at its peak?

RNG eSports Club was founded in 2012 and has 9 game divisions (12 teams). It can be said that six or seven years ago it was the most influential e-sports club in the country; none of them were among them.

In the League of Legends field, the club has been runner-up in the League of Legends World Finals 2 times, won the MSI Mid-Season Championship 3 times, and won the LPL 5 times. Moreover, in the League of Legends program at the 2018 Jakarta Asian Games, the RNG team had six players and four team members won the championship medal.

At its peak, RNG had more than 10 sponsors, and the team uniform was covered with big name logos such as Mercedes-Benz, HP, Logitech, and Tiger, and there was an endless flow of capital seeking cooperation.

However, e-sports have commercial value only when there is a focus on traffic. In recent years, the popularity of games has declined, club lawsuits have been raging, and performance has deteriorated. A series of adverse factors have pushed RNG to the edge of a cliff, creating a situation where it is difficult to recover.

Although the domestic e-sports industry is currently booming, e-sports clubs have always fallen into a strange circle of “losses.”

E-sports tournament practitioner Xiao Yao told the Blue Whale reporter that the e-sports industry's burning money is nothing new. A club often has multiple teams. One team has no less than 5 people. Plus positions such as coaching and logistics, the salary alone requires tens of millions of dollars a year. If you count star players, then you also need to pay high transfer fees. Currently, the salary of top players in the LPL League is almost 20 to 30 million. However, these are just labor costs, not counting expenses such as marketing, space, equipment, etc., and the extent to which the club burns money can be seen.

“Correspondence, however, is that the club's business model is relatively uniform. Most of the revenue comes from brand sponsorship, media copyright revenue, tournament bonuses, and peripheral products, etc., which can account for more than half of the sponsorship revenue. If the team's performance is poor, it will directly affect the club's revenue. Currently, most domestic e-sports clubs are losing money.”

Xiao Yao cites RNG as an example. Previously, when the team had good results, they were only able to barely maintain team operations, but now it's not what it used to be. The team's results this season are only fourth to last, which undoubtedly worsens the situation for the club. Today's RNG is probably left with only one brand and exhausted feelings.

E-sports industry capital accelerates renewal and iteration

Why did the giants spend a lot of money to make a crazy layout

In recent years, the capital behind domestic e-sports clubs has gone through many updates and iterations. Companies that lose money and are unable to maintain operations can only choose to sell clubs; they often take over strong capital.

For example, BLG and JDG are currently the two teams with the best LPL records and the most popular teams behind them, social media giant Station B and e-commerce giant JD, respectively.

In December 2020, BLG welcomed the entry of industry giant Ping An Bank, reached a naming cooperation, and the team officially changed its name to BLG Ping An Bank. Notably, the collaboration between Ping An Bank and BLG eSports Club became the first case of a named league team in the League of Legends Professional League (LPL).

In June 2021, JDG welcomed the arrival of CPU giant Intel, and the two reached a two-year naming partnership. Since June 6, 2021, JDG has officially changed its name to JDG Inter Esports Club (JDG Inter Esports Club).

In this era of capital games, e-sports has become a “local tycoon game” that only giants can afford. For many established capitalists, spending a lot of money to invest in e-sports teams with the intention of speeding up the transformation through the young market circuit of e-sports.

For the team, the support of having strong capital means being able to buy better players and coaches, and the team can have a better infrastructure and ecological environment.

Other than burning money

Where is the new generation of e-sports capital still strong?

However, e-sports is far from being as simple as “burn money buy buy”. In addition to the financial game, there is also a battle of multiple factors such as the underlying business model, operating system, talent training mechanism, industrial ecology, and logistics support.

Take JDG as an example. The team's ability to achieve such results in recent years is not only a proof of the club's strength at the operational level, but also a concentrated expression of JD's layout plans in the e-sports field over the years.

As early as many years ago, JD was keenly aware of the huge market in the e-sports industry, gradually began integrating industry supply chain resources, and began building a new ecosystem for the game industry, including cooperating with major manufacturers to launch C2M (Customer to Manufacturer) e-sports products, forming professional e-sports teams, creating its own tournament brands, and collaborating with major brands to launch Super Category Equipment Day.

Using e-sports to create influence, and then feeding back the platform through the huge traffic attracted by e-sports. Over the years, with the combined model of e-sports+e-commerce, JD has formed a closed loop of industrial ecology with long-term development.

On the other hand, RNG did not do a good job in commercialization and industrial ecology during its peak, and simply relying on sponsorship will inevitably be impossible for a long time.

On the question of the capital behind it, Xiao Yao said, “For giants such as JD and Station B, whether or not clubs make money is not the main consideration. They need huge e-sports traffic to feed back the company's main business. As we all know, what the e-sports industry lacks is traffic, and capital is not lacking. Only when the two complement each other can the e-sports industry return to a healthier and more sustainable development path.”